Of course it’s nuanced, but the recent surge in gold price is presumably being driven by wide-spread central bank buying as sovereign economies around the world brace for de-globalisation as a trend of populism plays out.
This fundamental support for gold has been compounded by private investor buying and technical traders begetting the momentum. Further, perhaps most importantly, fiat currency debasement has boosted gold priced in U.S. dollars, as well as many other assets including stocks and bitcoin – which are all sitting at or around all-time highs despite recent neck-breaking volatility.
On the other hand, diamonds and other precious gemstones are typically not bought by central banks as a store of value given their lack of liquidity (due to the lack of fungibility). That said, Russia’s Gokhran, which buys for the nation’s precious metal and stone reserve, is the notable exception. For context, in June, Russian state-media outlet Interfax, reported that the Gokhran has a mandate to purchase up to $1.6 billion of precious metals and gemstones for the 2025-2027 period, “about half” of which will be diamonds.
While gold is up over 55% year-to-date, marking the biggest rally since the late-1970’s, the natural diamond industry is facing a historic lull which has sent prices down 40% from the all-time highs. It is worth noting that lab-grown diamond (LGD) prices have continued a precipitous fall as improvement in production technologies, as well as multiplied output, has continued to reduce the relative cost of the manufactured material.
For natural diamond jewellery buyers, softer diamond prices have offset rising precious metal prices. For a simple unbranded solitaire ring, historically the stone has represented upwards of 80% of the total value, with the setting accounting for less than 10%. However, given the current state of material prices, the stone is now estimated to account for 65-70% of the total cost with the setting now 10-20%.
With lab-grown diamond jewellery, the stone is quickly becoming the least expensive component – high-quality LGD can be found by astute consumers for as little as a couple hundred dollars a carat. Further, there have even been widely publicised jewellery wholesaler promotions offering a free LGD with the purchase of a setting – an industry first.
With more laborious jewellery, such as tennis bracelets and necklaces, the changing price dynamics have been less profound as workmanship represents a larger portion of the cost.
If anything, the trade is seeing a general trend of larger stones and daintier settings, reflecting the current precious metal and gem price dynamics. With natural diamond jewellery, larger goods, 2-carat-plus are the best performing category. With LGD jewellery, 3, 4 and even 5-carat-plus stones are becoming the norm.
It could be in the industry’s best interest to actually lean into higher-prices at the higher end – by continuing to use high-karatage gold and larger, high-quality natural diamonds. Consumers of this category tend to see jewellery as a store of value. Rising material prices and thus higher fine jewellery prices reinforce this notion. Rising prices should be viewed as a positive development by regular consumers that presumably already have jewellery collections – it should serve as a reminder that the jewellery they already own has appreciated in value.
At the lower-end, it continues to be all about price. With ever-affordable LGD and relatively inexpensive “modern” jewellery metals, such as titanium and cobalt (and even aluminium), high-quality, durable jewellery is now very accessible at low hundred-dollar price points. There is an ever-growing global customer base that desires this category of jewellery.
Further, it could be argued that less-traditional metals, such as those mentioned above, provide a very fitting material to set LGDs – as both fall into a class of next-gen jewellery materials.
Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis and forecasts of the diamond industry please consider subscribing to his State of the Diamond Market, a leading monthly industry report; an index of previous editions can be found here. Also, listen to the Paul Zimnisky Diamond Analytics Podcast on Spotify or Apple Podcasts for exclusive full-length conversations with special guests from the gem and jewelry industry. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be followed on X @paulzimnisky and on YouTube @paulzimnisky.
Paul will be giving a keynote presentation at the Prospectors & Developers Association of Canada (PDAC) Convention in Toronto, Canada on March 2, 2026.
Disclosure: At the time of writing Paul Zimnisky held a long equity position in Brilliant Earth Group and Newmont Corp. Paul is an independent board member of Lipari Mining Ltd, a publicly-traded Canadian company with an operating diamond mine in Brazil and a development-stage asset in Angola. None of the above constitutes investment advice, please read full disclosure at www.paulzimnisky.com.
